On July 1, Coastal Distribution Company is considering leasing a building and buying the necessary equipment to operate a public warehouse. Alternatively, the company could use the funds to invest in $740,000 of 5% U. S. Treasury bonds that mature in 14 years. The bonds could be purchased at face value. The following data have been assembled: Cost of equipment $740,000 Life of equipment 14 years Estimated residual value of equipment $75,000 Yearly costs to operate the warehouse, excluding depreciation of equipment $175,000 Yearly expected revenues—years 1-7 $280,000 Yearly expected revenues—years 8-14 $240,000 Required: 1. Prepare a differential analysis as of July 1 presenting the proposed operation of the warehouse for the 14 years (Alternative 1) as compared with investing in U. S. Treasury bonds (Alternative 2). If an amount is zero, enter zero "0". Differential Analysis Operate Warehouse (Alt. 1) or Invest in Bonds (Alt. 2) July 1 Operate Warehouse (Alternative 1) Invest in Bonds (Alternative 2) Differential Effect on Income (Alternative 2) Revenues $ $ $ Costs: Costs to operate warehouse Cost of equipment less residual value Income (Loss) $ $ $ 2. Based on the results disclosed by the differential analysis, should the proposal to operate the warehouse be accepted? 3. If the proposal is accepted, what is the total estimated income from operations of the warehouse for the 14 years? $